Present: Peggy James, John Naples, Cynthia Nelson, Tania Nezrick, Ruth Peterson, Mary Helen Polensky

Absent: James Neale, Kathy Stelford

The meeting was called to order by Naples at 5:39 p.m. The minutes for April, May, June and July were approved as circulated with the correction of the July date to July 14^th. Motion made by Nelson and seconded by Polensky.

The second quarter financial statement showed sales were 11 % over budget for the quarter and approximately 19% over sales for the same quarter of 2004. The gross margin for the quarter was 32%. The largest department sales increases over the previous year were produce (up 25%), groceries (up 20 %), milk (up 14%), and cheese (up 10 %). James feels that this is most probably due to organic availability, and the excellent management of purchasing and inventory by Assistant Manager, Loreen Stravers.

Notable variances from budgeted amounts to actual amounts this quarter include office expenses for business and payroll check purchase and printing, and the purchase of a laminator and supplies to enhance store signage.

The bank charges are up due to a computer error at the credit card processor. A claim has been submitted to recoup some double charged fees. The remainder of the increase is due to the cost of doing credit card business. Approximately 1/3 of our sales are now paid for by credit card.

Travel expenses are up due to some charges that came through this quarter from Straver’s attendance at the produce seminar in Menomonie during the first quarter.

The adjustments to income reflect $677.00 in expenses related to the sale of Blooming Prairie and $250.00 stolen petty cash.

We now have a healthy checking account balance that varies between $27,000 and $32,000 so we can pay for orders promptly without using a line of credit from time to time. The refrigerator doors are paid for and will be installed sometime in September.

Unemployment benefits were granted to a previous employee but an appeal is in process. James met with the clerking staff to answer any questions. The new employee started well and continues to be learning and serving well.

Judy Krajewski is interested in serving on the board. Nezrick will contact her.

The outreach committee staffed a booth at the Alternative Energy Fair. James worked in the store so Emily (store clerk) could work with Nezrick in the booth selling food and talking about DSC. We received much good publicity and made about $350.00 profit on the food items sold.

At the fair, a person from the Rock River Times asked DSC to write for the organic page he has in his paper. Also, another individual made an inquiry about a possible branch of DSC in Rockford in a building being constructed in the downtown area. James will look further into the site and situation described.

There were no other committee reports.

James had a good meeting in Grand Marais. She finds it valuable to be associated with other smaller cooperatives. She has received good information and insights from the meetings and feels it is energizing. This group of 10 cooperatives varies from the smallest, which does about $200,000 of business each year, to one that does about $1.5 million in business each year. DSC may be in the $750,000 range after this very successful year if sales continue at the current level.

Inboden’s newly refurbished parking lot now drains water onto our property. Our landlord and the city have been contacted about the problem.

The next board meeting will be on Monday, September 19 at 7 p.m. We will try to meet on the third Monday of each month.

Motion to adjourn was made by Nelson and seconded by Nezrick. The meeting was adjourned at 6:37 p.m.

Ruth Peterson,

Secretary